Sheela Foam Pvt Ltd, which sells mattresses under the Sleepwell brand and is one of the two top brands in the market, has filed its draft red herring prospectus (DRHP) with capital markets regulator SEBI to float its initial public offer (IPO).
The proposed issue will entirely comprises of offer for sale by its promoters and the firm shall not get any money from the IPO.
It is one of the few private firms that are looking to go public and are not already backed by a private equity investor. Last year, Motilal Oswal Private Equity Advisors Pvt Ltd (MOPE), the PE arm of Motilal Oswal Financial Services Ltd, invested Rs 90 crore (about $13.5 million) in the country's top mattress maker Kurlon Ltd, that sells products under the brand Kurl-on. That deal also included RS 20 crore worth of shares sold by Kurlon promoters.
Here's a snapshot of Sleepwell and the issue
Size: Issue comprises offer for sale by its promoters to raise Rs 510 crore.
Bankers: Edelweiss Financial Services Ltd and ICICI Securities Ltd
Company
Sheela Foam sells foam, coir and spring mattresses under the Sleepwell brand and industrial application mattresses under the Feather Foam brand. It operates in a highly fragmented market where two thirds of the market is under unorganised sector. In the organised sector, it competes with Kurlon, Duroflex and Coirfoam besides international brands like Raha, Hastens, Simmons and SpringAir among others.
Launched in 1971, the company has 11 manufacturing facilities in India. Though all these facilities are utilised for manufacturing home comfort products, five of them also produces PU foam. It claims to have a foam production capacity of 1,23,000 tonnes per annum(TPA).
The mattress maker also has an international presence through its wholly owned subsidiary, Joyce Foam Pty Ltd in Australia. Joyce operates five manufacturing facilities that exclusively manufacture PU foam and has a total installed production capacity of 10,500 TPA in fiscal year 2015-16. It also exports technical foams to countries in the Middle East, South Asia, Europe, US, Brazil and Argentina.
As of March 31, 2016, exclusive Sleepwell outlets comprised 218 Sleepwell Worlds, 402 Sleepwell Galleries and 819 Sleepwell Shoppes. The home-comfort products are also being sold by over 2,500 multi-branded outlets.
Sheela Foam boasts of a pan-India distribution network. As of March 31, 2016, the company had over 100 distributors and over 2,000 retail dealers.
Financials
The company churned out a 9.4% growth in net sales to Rs 1,550 crore but saw net profit zoom to Rs 104.7 crore in 2015-16 compared to Rs 42.6 crore the previous year.
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